Canadian Cannabis company Tilray has announced it is closing its High Park Gardens greenhouse in Leamington, Ontario – a move that is expected to save the firm about $7.5 million annually. The 406,000-square-foot facility was originally owned and operated by Natura Naturals Inc., which Tilray acquired last year in a $24.4 million deal.
CEO Brandon Kennedy said the closure was necessary for the “evolving needs” of the business “against a challenging industry backdrop.” The company did not indicate whether the closure would lead to job losses and, if so, how many jobs would be affected.
“The decision to close a facility is never easy but we are confident that this will immediately put Tilray in a better position to achieve our goals of driving revenues across our core businesses and working towards positive adjusted [earnings before interest, taxes, depreciation and amortization] by the end of 2020. We are very confident our existing operations team will continue to serve our valued patients and customers with no interruption.” — Kennedy in a statement
The company said the greenhouse closure is part of its long-term “optimization plan” for adult-use facilities in Canada.
Tilray initially purchased Natura Naturals Holdings Inc. in a separate 2019 deal for $50.8 million; the greenhouse was part of the $24.4 million deal for Natura Naturals Inc, according to MarketWatch.
Yahoo! Finance reports that shares in the company (TLRY) have fallen 37 percent year-to-date but enjoyed a recent 5 percent spike yesterday – along with many other cannabis firms – after New York Gov. Andrew Cuomo said he wanted to legalize cannabis in the state “in the near future.”
The closure of the greenhouse is expected over the course of six weeks.
In March, licensed Canadian producer Canopy Growth announced it closed two greenhouses, which laid off about 500 employees.
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